The Sitening Blog has a how-to that'll explain in some detail the "smart way" to keep your Mac backed up.

I'm a paranoid person when it comes to backing up my files, but it took a hard drive crash of my own to make me realize how important backing up can be. Since then, I've gotten very good at making sure my data is secure. The setup I'm about to describe works for me. It's based on how I prioritize my data and on the budget I'm willing to spend to keep everything safe. It's not perfect for everyone, so take what I say with a grain of salt - an example of where to start and what's possible.